UM Motorcycles Is Leaving India
The JV between the American manufacturer and Lohia Auto has turned sour
We had reported earlier this year that UM Motorcycles would resume its operations in India by the festive season, but unfortunately that hasn’t been the case. Rather, the manufacturer seems to have wrapped up its operation in the country, with no possibility of production resuming in the near future and most dealerships shutting down.
US-based UM Motorcycles had tied up with local partner Lohia Auto to establish UM Lohia Two Wheelers in 2014. The JV set up a manufacturing plant in Kashipur, Uttarakhand, with an annual production capacity of 1,00,000 units, and brought in four of UM’s Renegade cruiser models. However, since then, the company has been plagued with recall issues and then had to stop sales of its motorcycles in April this year since they did not meet ABS safety norms.
This has caused friction between the two partners, and production hasn’t restarted since then. There doesn’t seem to be any chance of it happening in the short-term future either. “As of today getting operational in the near term is not possible because there is no support from the UM side." said Ayush Lohia, CEO of Lohia Auto.
Between the two partners’ conflict, the dealers have been left high and dry, with most of them being forced to shut shop and the remaining few servicing only previously sold bikes. It is estimated that it costs approximately Rs 90 lakh to Rs 1 crore to set up a dealership, so this has resulted in a huge capital loss to the dealers, who were already suffering tremendously due to the absence of any sales.
The future looks extremely bleak for UM in India at the moment, with its local website seemingly defunct and dealers threatening to pursue legal action against the JV.
Source : Economic Times